Pillar Two for Irish Businesses (2025): Practical Steps for Accountants & Multinationals

If you’re an accountant or work for a multinational company in Ireland, understanding Pillar Two in Ireland is important. These new Pillar Two tax rules in Ireland introduce a global minimum tax of 15% for large multinational groups with global revenues exceeding €750 million.

While the usual 12.5% corporate tax rate stays the same for most companies, groups with global revenues over €750 million must ensure they pay a minimum tax rate of 15%. This can mean extra tax to pay and more reporting to do.

Many accountants and businesses find Pillar Two challenging because the rules are complex and the deadlines are strict. It’s important to understand who needs to comply, how to register with Revenue, file returns and meet deadlines to avoid penalties. Early preparation is key to staying on track.

This blog explains the main points about Pillar Two in Ireland for 2025. It covers the key rules, important deadlines and the practical steps accountants and multinational companies should take. This will help you meet your obligations and reduce risks.

Key takeaways

• Pillar Two in Ireland applies to multinational and large domestic groups with global revenues over €750 million, introducing a minimum 15% effective tax rate.
• Ireland keeps its 12.5% corporate tax rate but collects a 2.5% top-up tax (QDTT) to meet the global minimum.
• Three key rules: Income Inclusion Rule (IIR), Qualified Domestic Top-up Tax (QDTT) and Undertaxed Profits Rule (UTPR) ensure extra tax is collected.
• Mandatory registration by 31 December 2025 via Irish Revenue Online Service, penalties of €10,000 per entity if missed.
• First filing of Pillar Two returns and top-up tax payments due 30 June 2026 for fiscal year ending 31 December 2024.
• Safe harbour rules may exempt some groups from paying top-up tax but registration and filing are still required.
• Early assessment, registration, data tracking, calculation and professional advice are essential for compliance and risk reduction.

Pillar Two deadlines and registration: At a glance

Quick registration steps (via ROS):

1. Gather entity and group structure details
2. Identify your Designated Local Entity (DLE) if multiple Irish entities exist
3. Register for IIR, QDTT, and/or UTPR as applicable
4. Consider group filing elections to minimize administrative burden
5. Submit registration before 31 December 2025

What is Pillar Two in Ireland?

Pillar Two establishes a minimum tax rate of 15% for large multinational groups with annual revenues exceeding €750 million. It is a global agreement designed to prevent large companies from reducing their tax obligations by transferring profits between countries. This global minimum tax initiative in Ireland ensures fair taxation across jurisdictions.

Impact on Irish Businesses

Ireland will continue to apply its 12.5% corporation tax rate to businesses that fall outside the scope of this agreement:

• Businesses with revenues below €750 million are not affected by Pillar Two
• If your company’s global revenue is below this threshold, the new rules do not apply to you
• The standard 12.5% corporation tax rate remains unchanged for these businesses

Who does Pillar Two affect?

Pillar Two multinational tax in Ireland applies to:

• Multinational groups with global revenues of €750 million or more
• Large domestic groups meeting the same revenue threshold
• Groups that have met this threshold in at least two of the past four years

Approximately 1,600 entities in Ireland are estimated to fall within scope of this tax. While this represents a significant portion of Ireland’s multinational sector, the vast majority of Irish businesses remain unaffected due to the high revenue threshold.

The changing tax landscape

This OECD initiative represents a fundamental change in the international tax system:

• Companies can no longer select where to pay tax based solely on the lowest rates
• A global minimum standard is now in place
• Ireland is adapting to these new rules while maintaining its competitive position through skilled talent, quality infrastructure and a favourable business environment

What are the different Pillar Two rules?

Pillar Two uses three rules to make sure companies pay at least 15% tax. Each rule works at a different level to collect tax on profits below this rate.

1. Income Inclusion Rule (IIR)

What it means: The Income Inclusion Rule works at the parent company level. If your group pays less than 15% tax anywhere in the world, the parent company’s country charges extra tax to reach 15%.

The IIR applies first. It gives the parent company’s country first rights to collect any extra tax needed.

2. Qualified Domestic Top-up Tax (QDTT)

What it means: Ireland’s Qualified Domestic Top-up Tax allows Ireland to collect the difference between its 12.5% corporation tax rate and the 15% minimum rate.

Ireland’s corporation tax rate is 12.5%, which is 2.5% below the minimum. Ireland has introduced a QDTT so it can collect this 2.5% difference itself.

Without a QDTT, other countries would collect this extra tax instead. Ireland introduced this rule to keep this tax revenue rather than lose it to other countries.

3. Undertaxed Profits Rule (UTPR)

What it means: The Undertaxed Profits Rule is a backup mechanism. If the parent company’s country doesn’t have an IIR, other countries where the group operates can collect the extra tax instead.

The UTPR makes sure all profits are taxed at 15%. It splits any remaining extra tax between countries based on where the group has employees and assets.

How the Pillar Two effective tax rate calculation works?

The calculation for this tax rate is different from your standard corporation tax rate. Understanding this difference is important for compliance.

The basic calculation

The effective tax rate is calculated by dividing covered taxes by GloBE income for each country. The calculation uses your financial accounting figures with some adjustments. This means Ireland’s 12.5% corporation tax rate doesn’t automatically equal a 12.5% Pillar Two effective tax rate.

Several factors can create differences between your statutory rate and your Pillar Two effective rate:

• Permanent differences in your tax calculation
• Timing differences between accounting and tax recognition
• Tax credits and incentives
• Treatment of dividends and capital gains

The substance-based income exclusion

A substance-based income exclusion is available, which reduces your GloBE income by a percentage of payroll costs and tangible assets.

In practice, if you have real employees and real assets in Ireland, you can exclude some income from the top-up tax calculation. This exclusion recognises that companies with genuine economic presence in a country should not be penalised as heavily.

For 2024-2025, you can exclude:

• 10% of payroll costs
• 8% of tangible assets

These percentages gradually reduce until 2033, when they will settle at 5% for both. This transition period encourages real economic activity rather than profit shifting.

Jurisdictional blending

Jurisdictional blending means the income and taxes of multiple companies in the same country are combined. A high-tax company can offset a low-tax company, which can work in your favour if you have multiple Irish entities.

For example, if you have one Irish entity with a 10% effective tax rate and another with a 17% effective tax rate, you calculate one combined rate for Ireland. This often reduces or eliminates top-up tax compared to calculating each entity separately.

Critical deadlines for Pillar Two in Ireland for 2025

Understanding the key dates for Pillar Two compliance in Ireland is essential to avoid penalties and stay on track. The timeline is designed to give businesses sufficient time to prepare, but these deadlines are firm and will be strictly enforced.

Registration deadline: 31 December 2025

All in-scope groups must complete their registration by the end of 2025. Missing this deadline results in a penalty of €10,000 per relevant Irish entity. For groups with multiple entities, these penalties can quickly accumulate, making early registration vital.

Registration is done online through the Revenue Online Service (ROS), where Irish Revenue has also provided a dedicated Pillar Two Hub for guidance.

First filing deadline: 30 June 2026

For fiscal years ending 31 December 2024, the first Pillar Two information return and any resulting top-up tax payments are due by 30 June 2026. This is 18 months after the end of the first year the rules apply. Following years have a 15-month deadline.

This extended timeframe for the first year recognises the complexity of implementation, but businesses are encouraged to start data collection and calculations early to meet this requirement without pressure.

The Pillar Two registration process in Ireland

Irish Revenue launched the Pillar Two Hub on 15 August 2025, providing a central resource covering registration, filing and payment obligations for groups in scope. This hub is your go-to platform for managing all Pillar Two compliance matters in Ireland.

What you need to register?

When completing your Pillar Two registration in Ireland through the Revenue Online Service (ROS), you will need to provide key information, including:

• Your tax head or reporting obligations (such as liability under IIR, UTPR, or QDTT)
• Details of the Ultimate Parent Entity (UPE)
• Information on your group structure within Ireland
• Designated Local Entity (DLE) details if you have multiple Irish entities
• Details of QDTT or UTPR groups, if applicable

Gathering all relevant legal entity identifiers, tax references and group structure information before starting registration will make the process smoother and faster.

Group Filing Elections

For groups with multiple Irish entities, the administrative burden can be reduced by appointing a single Designated Local Entity (DLE) to file the GloBE Information Return for the entire group in Ireland.

You can also form QDTT or UTPR groups, with one entity handling filing and payment on behalf of the group. This approach simplifies compliance and lowers the risk of errors and inconsistent filings across entities.

Common mistakes to avoid

Based on early implementation experiences and Revenue guidance, here are the most frequent errors businesses make:

Registration errors

• Waiting until December 2025: Systems may be overloaded, and technical issues take time to resolve
• Incomplete entity identification: Failing to identify all Irish entities within the group
• Wrong tax reference numbers: Using incorrect or outdated tax identifiers
• Missing DLE appointments: Not designating a Local Entity when managing multiple entities

Calculation mistakes

• Ignoring substance exclusions: Not claiming the payroll and tangible asset exclusions you’re entitled to
• Incorrect jurisdictional blending: Failing to properly combine all Irish entities for effective tax rate calculations
• Covered taxes errors: Misidentifying which taxes count as “covered taxes” for Pillar Two purposes
• Currency conversion issues: Using inconsistent exchange rates across calculations

Record-keeping failures

• Insufficient documentation: Not maintaining detailed records of calculation methodologies and assumptions
• Missing safe harbour evidence: Failing to document why safe harbour provisions apply
• Incomplete group structure records: Not keeping up-to-date documentation of entity ownership and relationships
• Poor data tracking systems: Relying on manual processes rather than implementing proper data collection systems

Filing oversights

• Assuming no filing is needed: Even if you owe no top-up tax, information returns are mandatory
• Missing simplified filing opportunities: Not taking advantage of simplified notifications when UPE files elsewhere
• Late payment submission: Separating return filing from payment, causing payment delays

Best practice: Engage professional advisors early, implement robust data collection systems, maintain detailed documentation, and conduct regular internal reviews of your Pillar Two position.

Safe Harbours: Simplifying Pillar Two Compliance

Not every company is required to perform a full Pillar Two tax calculation annually. Safe harbour provisions recognise that full compliance calculations can be resource-intensive and sometimes unnecessary.

Transitional Safe Harbours (2024–2026)

These temporary rules apply in the first three years. If a group meets one of the following tests, the top-up tax for that jurisdiction will be considered zero for the year:

• De Minimis Test: Applies where Country-by-Country Report (CbCR) revenue in Ireland is under €10 million and profit (or loss) before tax is less than €1 million. This test protects smaller operations from disproportionate compliance burdens.
• Simplified Effective Tax Rate (ETR) Test: Applies when the effective tax rate exceeds 15% in 2024, 16% in 2025 and 17% in 2026, recognising the time needed to develop accurate calculations.
• Routine Profits Test: Applies if the substance-based income exclusion fully covers the GloBE income, meaning no remaining income is subject to top-up tax.

Entities qualifying under any of these tests are exempt from paying the top-up tax for that year but must still file information returns.

Permanent Safe Harbours

Ireland’s Pillar Two QDTT in Ireland is expected to qualify as a safe harbour. This means top-up tax on Irish income will be collected domestically, preventing other jurisdictions from applying top-up taxes on Irish profits and avoiding double taxation.

The GloBE Information Return: What Accountants need to know?

Any Irish entity that is within scope of Pillar Two must submit a top-up tax information return to Revenue within 15 months from the end of its fiscal year. This return represents a significant new compliance obligation under Pillar Two tax compliance in Ireland.

This return is based on the OECD’s standardised GloBE Information Return (GIR) format. The GIR is designed to be consistent across all implementing jurisdictions, which should theoretically make compliance easier for multinationals operating in multiple countries.

What the Information Return includes?

The GIR is a comprehensive document that provides a complete picture of your group’s global tax position. Many groups are finding that preparing the GIR requires coordination across multiple jurisdictions and significant data gathering efforts.

Simplified filing options

You may not need to file a full GIR in Ireland if:

• The UPE files the GIR in another jurisdiction that has an automatic exchange of information agreement with Ireland (you can file a simplified notification of filer instead), OR
• A designated filing entity files in another jurisdiction (the same simplified process applies)

This reduces the compliance burden for groups with centralised tax functions. If your group’s parent company files a full GIR in another jurisdiction with an automatic exchange agreement with Ireland, your Irish entities can file a simplified notification instead of duplicating the full return.

Pillar Two Tax Planning for Accountants

If you are an accountant, here is what you should tell your clients to do. Following these steps will make Pillar Two compliance easier.

1. Assessment phase (Now)

Start by:

• Checking whether your group meets the €750 million limit
• Identifying all Irish group entities
• Reviewing your group structure to understand tax duties
• Checking if you qualify for any safe harbours

This assessment phase is important. You need to understand not only whether you are in scope, but also which specific Pillar Two obligations apply to your group. Different groups will have different combinations of IIR, UTPR and QDTT obligations based on their structure and where they operate.

2. Registration phase (Before 31 December 2025)

• Gather required information for each Irish entity
• Decide on group filing elections
• Identify your DLE if you have multiple entities
• Register through ROS

Do not leave registration until December. Start the process in autumn to allow time for solving any issues or questions. Revenue staff may face high numbers of registrations near the deadline.

3. Data collection phase (Throughout 2025)

• Set up systems to collect GloBE income data
• Track covered taxes in each country
• Calculate substance-based exclusions for payroll and physical assets
• Monitor effective tax rates

This phase requires significant systems work. Your existing accounting and tax systems may not collect data in the format needed for Pillar Two. Many groups are putting in new software solutions or changing existing systems to handle GloBE calculations.

4. Calculation phase (Early 2026)

• Perform full Pillar Two calculations (or confirm safe harbour eligibility)
• Calculate top-up tax amounts
• Prepare the GloBE Information Return
• Complete separate returns for IIR, UTPR and QDTT as needed

Allow enough time for this phase. The calculations are complex and may produce unexpected results needing investigation. Complete calculations early to allow enough time for review.

5. Filing and payment phase (By 30 June 2026)

• File your information return
• File and pay any top-up tax due
• Keep documentation for audit purposes

Keep detailed records of all calculations and assumptions. Revenue will expect you to support your Pillar Two filings and the complexity of the rules means audits are likely, particularly during the early years of implementation.

Pillar Two tax impact on Multinationals in Ireland

Understanding Pillar Two tax impact on multinationals and how it will affect your business is important for planning ahead. The effect depends on your group’s structure, the tax rates you pay and how much real business activity you have in Ireland.

Short-term impact

In the short term, the global minimum tax in Ireland may lead to more tax being paid in Ireland. If your group pays less than 15% tax in Ireland, you will pay extra top-up tax to reach 15%.

However, companies with many employees and assets in Ireland will pay less top-up tax because of the substance-based income exclusion. This rule is designed to tax profit shifting but not genuine business activities.

Many companies find their actual Pillar Two tax is lower than expected, especially those with real operations in Ireland. The rules on substance and blending groups of companies usually work in their favour.

Long-term impact

In the long run, companies might change how they organise their business. They will think about where to locate staff and assets to reduce tax under Pillar Two. They will also watch Ireland’s Qualified Domestic Top-up Tax (QDTT) and how it works with other countries’ rules.

Some groups are reviewing their global structures because Pillar Two means tax planning now needs to look at the overall global tax rate, not just individual countries.

Pillar Two Compliance Tools and Resources

Having the right resources is key to making Pillar Two compliance in Ireland easier. Below are essential tools and official guidance to support your compliance efforts:

Irish Revenue Resources

• The Pillar Two Hub is the main source for updates, guidance and news on Pillar Two obligations in Ireland.
• The Revenue Online Service (ROS) is the portal for registration, filing and payments related to Pillar Two.
• Technical details and procedures are set out in the Tax and Duty Manual: Part 4A, which provides detailed legislative and administrative guidance.

Irish Revenue has been proactive in publishing guidance but continues to update materials as the regime evolves. Regularly checking the Pillar Two registration hub ensures you stay informed about the latest developments.

OECD Resources

Though not national sources, the OECD’s Model GloBE Rules underpin Pillar Two globally, providing essential framework and commentary. These are important for understanding the technical aspects of the rules and how they apply internationally.

Official administrative guidance and XML schemas for electronic filing are regularly released by the OECD to assist with practical implementation.

Professional Guidance from the Big 4

Leading accounting firms have published comprehensive Pillar Two guides:

• Deloitte: Global Minimum Tax Guide
• PwC: Pillar Two Resources
• EY: Global Minimum Tax Overview
• KPMG: Pillar Two Implementation

When to seek Professional help?

Consider engaging tax advisors if you’re uncertain whether you’re in scope, have complex group structures, operate in multiple jurisdictions, need help with effective tax rate calculations, or want to optimise your Pillar Two position.

Most in-scope groups are engaging professional advisors to some degree. The rules are simply too complex and new for most in-house teams to handle entirely alone, at least in these early implementation years.

Action Plan: What to do right now?

Whether you are an accountant or a multinational business, here are clear steps to help you meet your Pillar Two obligations on time.

If you are an Accountant or Tax Professional

• Start now: Identify which clients are in scope (over €750 million revenue), contact Irish Revenue if needed and begin collecting registration details. Review group structures and consider filing options.
• By 31 December 2025: Complete registration for all in-scope entities through the Revenue Online Service (ROS), decide on group filing elections and set up your data collection systems.
• By 30 June 2026: Finish Pillar Two calculations, prepare and file the information returns and pay any top-up tax due.

Remember, starting early and working steadily is key. Pillar Two is a complex, ongoing process, not a one-time task.

If you are a Multinational Business

• Start now: Confirm if your group is in scope, identify your Irish entities, work with your tax advisors or accountants and check your effective tax rate in Ireland.
• By 31 December 2025: Ensure all registrations are complete, understand your group filing elections and assess potential top-up tax liabilities.
• Ongoing: Keep up to date with guidance from Irish Revenue’s Pillar Two Hub, consider Pillar Two in your business decisions and maintain detailed records.

Pillar Two affects many parts of the business including tax, finance and strategic planning so ensure all relevant teams understand the impact and deadlines.

One-page compliance checklist

Immediate actions (Now – Q4 2025)

• [ ] Confirm if group exceeds €750 million revenue threshold
• [ ] Identify all Irish entities within scope
• [ ] Determine applicable rules (IIR, QDTT, UTPR)
• [ ] Review group structure and parent entity location
• [ ] Assess potential safe harbour eligibility
• [ ] Gather registration information (UPE details, tax references)
• [ ] Appoint Designated Local Entity (if multiple entities)
• [ ] Implement data collection systems for GloBE calculations

Registration phase (Before 31 December 2025)

• [ ] Register all in-scope entities via ROS
• [ ] Complete group filing elections
• [ ] Confirm registration acknowledgments received
• [ ] Document all registration decisions and structures

Ongoing compliance (2025-2026)

• [ ] Track payroll costs and tangible assets for substance exclusions
• [ ] Monitor effective tax rates across all jurisdictions
• [ ] Collect covered taxes data by jurisdiction
• [ ] Calculate GloBE income using financial statements
• [ ] Document all calculation methodologies
• [ ] Subscribe to Revenue and OECD update notifications

First filing preparation (Q1-Q2 2026)

• [ ] Complete Pillar Two effective tax rate calculations
• [ ] Determine if safe harbour provisions apply
• [ ] Calculate top-up tax liability (if any)
• [ ] Prepare GloBE Information Return
• [ ] Review and validate all calculations
• [ ] Arrange payment processing if top-up tax due

Filing deadline (By 30 June 2026)

• [ ] Submit information return via ROS
• [ ] Pay any top-up tax due
• [ ] Retain complete documentation for audit
• [ ] Set reminders for future annual filings (15-month deadline)

Continuous monitoring

• [ ] Review Revenue Pillar Two Hub for updates monthly
• [ ] Monitor OECD guidance releases quarterly
• [ ] Assess impact of business structure changes
• [ ] Conduct annual compliance reviews
• [ ] Update registration details for entity changes

Follow this checklist and track your progress to ensure nothing is missed.

Staying updated

Pillar Two is a developing area. New OECD guidance is released regularly and Irish Revenue continues to update its procedures and Pillar Two tax guidance in Ireland. This isn’t a “set and forget” compliance requirement.

To stay informed, monitor the Irish minimum tax guidance on the Irish Revenue Pillar Two Hub regularly, subscribe to updates from professional tax bodies, engage with your tax advisors regularly and attend Pillar Two seminars and webinars.

The implementation of Pillar Two represents significant change, but with proper planning and timely action, compliance is manageable. The key is to start now, understand your obligations and seek help when needed. Those who take early action will find the process far less stressful than those who wait until the Pillar Two for Irish businesses 2025 dates are looming.

Frequently asked questions about Pillar Two in Ireland